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Growth Statistics of the Indian Film Industry:

This timeline presents the value of the Indian film industry from financial years 2014 to
2018, and provides forecasts until 2023. In the 2023 fiscal year, the value of the Indian
film industry was forecasted to amount to around 229 billion Indian rupees1.
The Indian film industry is expected to grow at 11.5% year-on-year, reaching total gross
realisation of Rs 23,800 crore ($3.7 billion) 2
At present, the film industry grosses a total revenue of Rs 13,800 crore ($2.1 billion), and
it has grown at a CAGR (compound annual growth rate) of over 10% in the last couple of
years3.
In terms of box office collection, Indian film industry is the world’s fourth largest
following the US, China and Japan, 2012-16.
The Indian film Industry is the largest in the world in terms of number of films produced
with between 1500 to 2000 films produced every year in more than 20 languages. In
terms of revenue the industry had=s gross box office realizations of $2.1 billion which is
expected to grow at 11% CAGR reaching $3.7 billion by 20204.
The Indian media industry has tremendous scope for growth in all the segments due to
rising incomes and evolving lifestyles. Media is consumed by audience across
demographics and various avenues such as television, films, out of home (OOH), radio,
animation and visual effect (VFX), music, gaming, digital advertising, and print.
The Media & Entertainment industry is anticipated to grow at a Compound Annual
Growth Rate (CAGR) of 13.10^ per cent during 2018-23 to reach Rs 2,660.20 billion (US$
39.68 billion) in FY23 from Rs 1,436.00 billion (US$ 22.28 billion) in FY18. The industry
provides employment to five million people, including both direct and indirect
employment as of 20175.

FILM FINANCING
Until 1990’s the norm was to receive the film funding from private financiers. Majorly,
the amount of money put by the private financiers would lead up to lot of black money
and hassles with respect to the payments for different transactions and different people.
In the new millennium, came finance from institutions like banks—like IDBI (Industrial
Development Bank of India) which started financing at the rate of 15-16% per annum,
after which came corporates about five years ago that brought investments on

1
https://www.statista.com/statistics/235837/value-of-the-film-industry-in-india/
2
according to a report by industry lobby PHD Chamber and bed & breakfast accommodations aggregator
BnBNation.
3
http://indpaedia.com/ind/index.php/Indian_film_industry:_statistics,_economics#2012-16:_Vis-.C3.A0-
vis_USA.2C_China_and_Japan
4
Delliote_TMT
5
https://www.ibef.org/industry/entertainment-presentation
partnership basis with equity partners not charging any interest, but taking 50% of the
revenue.
The content industry was ridden with issues like poor governance, lack of scale, opaque
cash dealings and so on.
Viacom18 Motion Pictures, Eros International, Reliance Entertainment and UTV Motion
Pictures are engaged in operations that involve acquisition, production, syndication,
marketing and worldwide distribution of full-length feature films.
Their pre-licensing deals entail music, television, satellite, home video, internet, digital,
in-flight, overseas and merchandising rights. Newer strategies include part-production
and revenue-sharing post-production. Not to mention the beeline of brands that want to
be associated with these films —either as sponsors or as part of the storyline (read brand
integrations).
Film distributor Rakesh Sippy has recently launched a Rs 200 crore film distribution-
cum-production fund, HBS Raksha Movies Fund, that would invest only in Bollywood
films.
Over the years, the investor community has shied away from funding Indian content
production companies, unconvinced about their business model. While they still remain
wary, they are definitely seeing these companies in a new light. Film funds are not new in
India. Funds like Religare-Vistaar died a slow death after investing in big budget films
such as Mausam and Victory, which flopped miserably. A large part of the industry was
run by individuals. So, the scale and the capability were never institutionalised. The
corporatized studios have tried to change that by bringing in financial discipline and also
opting for a slate of releases, consisting of some big films and some small films, to de-risk
their business and also to build scale.
Tlarger studios decided to have a slate, they were corporatized, they were making money
and they used that leverage to scale up. Movies like Chennai express and Dabangg have a
huge market ratio, them being box office hit movies as well. The Larger studios decided
to have a slate, they were corporatized, they were making money and they used that
leverage to scale up
Investment in big budget movies is out of reach for the most of us. What is common
between B.A. Pass, Style, Gangs of Wasseypur – Part 1 and Dum Laga Ke Haisha? These
were films made on ultra-thin budgets but turned out to be big commercial successes.
"These are only a fraction of the successful low-budget Hindi movies; there is a huge list
of titles in regional cinema that have done the same. Small ticket- Film financing is an
investment space where returns can be good. While big budget movies do not allow an
average person to invest, low budget films made by relatively new filmmakers require
funds.
WHY BOLLYWOOD’S INVESTMENT MODEL IS NOT WORKING?
Let’s take Walt Disney for example. Walt Disney's move to shuts its Hindi film-making
business underscores a rethink among corporate entities about backing big-budget, high-
risk movies. Shortly after its big-budget release Mohenjo Daro fizzled out at the box office,
Walt Disney decided to pull the plug on its Hindi movie production business.
This happened because Mohenjo daro , which was made at a cost of Rs. 115 crores, could
only hit up to 50-60 Crore on box office6.
There is a periodically review and realign of business priorities in response to evolving
market dynamics. Given the challenges with the current economic model for investing in
the local film industry, it is of the intend that shifting the focus of the current film strategy
to driving more of Hollywood movie slate in India.
Experts in the film trade are calling Walt Disney’s pullback the start of a crisis they have
long feared in the Bollywood movie industry, which churned out 204 films last year and
earned Rs10,140 crore in combined revenue, according to the 2016 report on the media
and entertainment industry by the Federation of Indian Chambers of Commerce and
Industry (Ficci) and KPMG.

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Walt Disney isn’t alone in suffering a streak of box-office bad luck after backing big-ticket movie projects. Ekta
Kapoor’s Balaji Motion Pictures Ltd and Anil Ambani’s Reliance Entertainment Pvt. Ltd have clocked more
losses than they’d like to recall.